Nassau Reinsurance Group Holdings Completes acquisition of traditional insurance business from Universal American
Nassau Reinsurance Group Holdings, L.P. (“Nassau Re”) and Universal American Corp. (NYSE:UAM) (“Universal American”) today announced the successful completion of Nassau Re’s previously announced acquisition of Universal American’s Traditional Insurance business.
The Traditional Insurance business consists of a closed block of insurance products, including approximately 150,000 insurance policies across Medicare supplement, life insurance, long-term care, disability insurance and other specialty health policies. Under the terms of the agreement, Nassau Re acquired all of the shares of Constitution Life Insurance Company (“Constitution Life”) and The Pyramid Life Insurance Company, as well as the Traditional Insurance business written by American Progressive Life & Health Insurance Company of New York on a 100% coinsurance basis. Going forward, these businesses will operate under the Constitution Life brand as a privately held, wholly owned subsidiary of Nassau Re.
At closing, Nassau Re paid approximately $30.5 million in cash, which is subject to post-closing price adjustments. As part of the transaction, Nassau Re contributed more than $20 million of new equity capital at closing to strengthen the businesses and support strategic growth opportunities.
“This latest acquisition further rounds out Nassau Re’s suite of capabilities, which now covers life insurance and annuity products, life insurance sales and distribution, asset management, policyholder administration, and onshore and offshore reinsurance capabilities,” said Phillip J. Gass, Nassau Re’s Chairman and CEO.
“In addition to providing stable profitability and predictable cash flows to the Nassau Re group, Constitution Life highlights our ability to creatively structure a transaction in order to provide a full and complete exit to Universal American for their non-strategic business lines. With its new equity capital and additional unfunded capital available to Nassau Re, this business is well-positioned to continue pursuing select closed block reinsurance transactions of long tail liabilities,” Mr. Gass said.
Richard A. Barasch, Chairman and CEO of Universal American, commented, “Our core strength is our proven ability to partner with providers, especially primary care physicians, to improve health outcomes while reducing costs in the Medicare population. With the sale of our Traditional Insurance business, we can better concentrate our efforts on growing our Medicare Advantage and Medicare ACO businesses.”
Nassau Re also announced today that Leland C. Launer, Jr., a Managing Director of Nassau Re, will also serve as President of Constitution Life, based in Lake Mary, Florida. Mr. Launer most recently served as CEO and President of Fidelity & Guaranty Life (NYSE:FGL).
The closing of this transaction follows the receipt of regulatory approvals from the states of New York, Texas and Kansas and the Cayman Islands Monetary Authority.
Debevoise & Plimpton LLP acted as legal advisor to Nassau Re, and Locke Lord LLP acted as legal advisor to Universal American.
About Nassau Re
Nassau Re currently has assets exceeding $17 billion, and focuses on building a franchise across the insurance value chain. Nassau Re’s extensive experience as owner-operators of numerous insurance and financial services businesses provides a competitive advantage in building a unique platform over the long term. Subsidiaries currently include The Phoenix Companies, Inc., Saybrus Partners, Inc., Nassau Asset Management, LLC, Nassau Re (Cayman) Ltd. and Constitution Life Insurance Company. Nassau Re was founded in 2015 with an initial capital commitment of $750 million provided by Golden Gate Capital. For more information, visit www.nsre.com.
About Universal American Corp.
Through its family of healthcare companies, Universal American provides health benefits to people covered by Medicare. The company is dedicated to working collaboratively with healthcare professionals, especially primary care physicians, in order to improve the health and well-being of those they serve while reducing healthcare costs. More information about Universal American is available at www.universalamerican.com.
